Transactions Positions Aleafia as Major Supplier, Retailer of Adult-use Cannabis

TORONTO, Nov. 21, 2018 (GLOBE NEWSWIRE) — Aleafia Health Inc. (TSXV: ALEF; OTCQX: ALEAF, FRA: ARAH) (“Aleafia“ or the “Company“), and Serruya Private Equity (“Serruya” and together with the Company, the “Parties”), have settled final forms of definitive joint venture and other agreements that will see the Parties launch a Canada-wide cannabis retail Joint Venture (“Retail JV”) along with a domestic and international cannabis brands Joint-Venture (“Brands JV”, and together with the Retail JV, the “Joint Venture”). Serruya will also make a $10 million strategic investment in Aleafia via a non-brokered private placement financing (“Private Placement”) and Aleafia will invest $5 million of such gross proceeds of the Private Placement into the Joint Venture.

The Brands JV will conduct business under the name “Flying High Brands Inc.” with Aleafia owning fifty-one percent (51%) and Serruya owning forty-nine percent (49%). The Joint Venture enables multiple income streams throughout the value chain, with Aleafia’s cultivation producing cannabis for processing, extraction, packaging and eventual listing in retail locations and with provincial distributors.

Additional Highlights:

Backed and supported with a $10 million investment by Serruya and its affiliate, International Franchise Inc., which has over 4500 quick service restaurant locations in over 50 countries

Serruya has also been a leading early cannabis industry force as cannabis industry investors in both emerging and established issuers and other industry participants

Launch approximately 20 proposed retail outlets, with a subsequent national and international expansion plan (excluding the U.S.)

Ready-made store design and retail systems in place, along with intellectual property including genetics and packaging

We greatly look forward to working closely with Aleafia’s strong management team. Together we will build and scale a retail cannabis chain with immediate national reach and global expansion plans. We are very excited to once again play an early role in developing one of the world’s largest cannabis companies.

Aaron Serruya, a Principal of SPE

“Aleafia is now well positioned to produce commercially proven international cannabis brands for our national cannabis retail network along with provincial distributors,” said Aleafia Chief Executive Officer Geoffrey Benic.

In launching adult-use cannabis operations, we will greatly benefit from working with and receiving Serruya’s substantial financial backing. These transactions will see Aleafia immediately assume a leadership role in adult-use cannabis production, supply and retailing, complementing our proven medical cannabis operations.

Geoffrey Benic, Aleafia Chief Executive Officer

Strategic Investment:

Serruya will also make a strategic investment in Aleafia through a $10 million non-brokered private placement and in return acquire 5 million common shares in Aleafia at a price of $2.00 per share.

The Retail JV will conduct business under the name “One Plant (Retail) Corp.” with Aleafia owning 9.9 percent and Serruya owning 90.1 percent. Aleafia will have the right of first refusal to increase ownership in the Retail JV up to 49 percent, subject to compliance with applicable provincial regulations at all material times. Aleafia will purchase its 51 percent stake in the Brands JV company by way of an issuance from treasury and the issuance of 6 million common shares in Aleafia to Serruya.

The transactions are subject to customary closing conditions, including receipt of final approvals of the TSX Venture Exchange.

For Investor & Media Relations, please contact:

Nicholas Bergamini, VP, Public Affairs

IR@AleafiaInc.com

About Aleafia Health Inc.:

Aleafia is a vertically integrated, national cannabis company with major medical clinic, cannabis cultivation and R&D operations. The company is a federally licensed producer and vendor of cannabis and will reach an annual production capacity of 98,000 kg of dried cannabis in 2019.

Aleafia operates 22 medical cannabis clinics staffed by physicians and nurse practitioners, with over 50,000 patients. The company is highly differentiated, maintaining the largest medical cannabis dataset in the world with significant intellectual property holdings and current R&D operations.

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